A court can grant relief from multiple pre-deposits in cases of overlapping GST demands.
Issue
When a taxpayer is faced with multiple, overlapping demand orders and notices from different GST authorities for the exact same issue and period, what is the appropriate legal remedy, and can a court provide relief from the statutory requirement of making a separate pre-deposit for each appeal?
Facts
- The petitioner was facing parallel proceedings and overlapping demands from three different GST authorities: DGST, CGST (East), and CGST (North).
- The underlying allegation in all the proceedings was the same: the fraudulent availment of Input Tax Credit (ITC) from fictitious suppliers without the actual supply of goods.
- The petitioner filed a writ petition in the High Court, arguing that being subjected to multiple adjudications and demands for the same issue by different wings of the same tax administration was illegal and unjust.
- The department’s simple counter-argument was that the petitioner had an alternate remedy available to them: they could file separate statutory appeals against each of the orders.
Decision
The High Court, while directing the petitioner to use the statutory appeal process, provided significant and pragmatic relief in favour of the assessee.
- The court acknowledged that there was a clear overlap between the demands and that requiring the petitioner to fight multiple appeals and make multiple pre-deposits would be unfair.
- It therefore crafted a specific solution:
- The petitioner was permitted to file appeals against the various orders.
- However, the mandatory pre-deposit was to be made only for one of the main orders.
- No pre-deposit was required for the appeal against the other order, as the court recognized that the demand amount was overlapping.
- Furthermore, the court ordered that a separate Show Cause Notice (SCN) be dropped entirely, as it was also overlapping with an existing order against which the petitioner was now filing an appeal.
Key Takeways
- Protection Against Multiple Proceedings: A taxpayer cannot be subjected to multiple proceedings and parallel demands from different authorities for the same alleged offense for the same period. This is a fundamental principle of justice that prevents harassment.
- Writ Courts Can Intervene in Jurisdictional Overlaps: While the “alternate remedy” of an appeal is the standard rule, High Courts can and will use their writ jurisdiction in exceptional cases. A clear case of overlapping jurisdiction and multiple parallel proceedings from different authorities is one such exception.
- Pragmatic Relief on Pre-deposits is a Key Tool: The court’s direction on the pre-deposit is the most important takeaway. It ensures that a taxpayer’s statutory right to appeal is not made practically impossible by a requirement to deposit the same disputed amount multiple times with different authorities.
- Streamlining the Legal Process: The spirit of the court’s order is to streamline the legal process and avoid unnecessary multiplicity of litigation. By dropping one SCN and waiving one pre-deposit, the court effectively guided the system towards a more consolidated and fair adjudication of the core issue.
HIGH COURT OF DELHI
R.U. Overseas
v.
Directorate General of Goods and Services Tax Intelligence DGGI
PRATHIBA M. SINGH and SHAIL JAIN, JJ.
W.P. (C) no. 14279 OF 2025
CM APPL. no. 58470 OF 2025
CM APPL. no. 58470 OF 2025
SEPTEMBER 16, 2025
Vineet Bhatia, Adv. for the Petitioner. Ms. Jyotsana Vyas, Sumit K. Batra, Piyush Beriwal, Ms. Ruchita Srivastava, Ms. Amisha P. Dash, Ms. Malika Kumari, Advs., Shashank Sharma, Senior Standing Counsel
ORDER
Prathiba M. Singh, J. – This hearing has been done through hybrid mode.
2. The present petition has been filed under Articles 226 and 227 of the Constitution of India, inter alia, challenging the following impugned orders:
| • | Order-in-Original dated 24th August, 2024 (hereinafter, ‘impugned order no.1’) |
| • | Order-in-Original dated 24th January, 2025 (hereinafter, ‘impugned order no. 2’) |
| • | Order-in-Original dated 1st February, 2025 (hereinafter, ‘impugned order no. 3’) |
3. These impugned orders relate to demands raised by the GST Department in respect of a large number of companies including the Petitioner. The summary of each of the orders is set out below:
Impugned Order No.1 dated 24th August, 2024
| (i) | This impugned order has been passed by the Delhi Goods and Service Tax (hereinafter, ‘DGST’) Department against the Petitioner in respect of certain reconciliations and other claims made by the Department. The various heads under which demands have been raised under this order are as under: |
| • | Under-declaration of output tax; |
| • | Excess claim of Input Tax Credit (hereinafter, ‘ITC’) including the ITC claimed from cancelled dealers. |
| (ii) | The total demand in this case is to the tune of Rs.8,96,398/- which includes tax, interest and penalty. The tax amount is to the tune of Rs. 4,64,580.00/-. |
| (iii) | The Petitioner has already filed an appeal in respect of this order which is pending before the Appellate Authority. |
Impugned Order No.2 dated 24th January, 2025
| (i) | This impugned order arises out of an investigation conducted against various firms commencing from M/s Anannya Exim. The allegation is that the said M/s Anannya Exim had obtained bills/invoices without any supply of goods, from various suppliers including M/s Ganpati Enterprises. The data on M/s Ganpati Enterprises’ portal revealed that the promoter of the said firm Mr. Sumit Tandon was also Director in M/s. Reema Polychem Pvt. Ltd. and M/s. Fortune Graphics Limited. The said three firms had shown outward supplies of Rs. 3470.04 crore, thereby passing of ITC amounting to Rs. 677.76 crore. |
| (ii) | The Central Goods and Service Tax (hereinafter, ‘CGST’) Department found a gap between inward and outward supply values. The inward supply only seemed to be Rs.1080 crores involving ITC of Rs. 211.57 crore. Investigation was then conducted and the Petitioner was one of the entities which was found to have received ITC of Rs. 4,64,580.00/- qua M/s Ganpati Enterprises, M/s. Reema Polychem Pvt. Ltd. and M/s. Fortune Graphics Limited. |
| (iii) | The total demand raised in this order against the Petitioner is to the tune of Rs. 26,047,208/-. |
Impugned Order No.3 dated 1s February, 2025
| (i) | This impugned order relates to investigation which was initiated against one M/s Choudhary Metals and M/s Kavita Metals wherein the transaction qua the Petitioner is ITC obtained from M/s. Fortune Graphics Limited to the tune of Rs. 9,999,135.00/-. |
4. The submission of Mr. Bhatia, ld. Counsel appearing for the Petitioner is that insofar as M/s Ganpati Enterprises is concerned, there is an overlap between impugned order No.1 and impugned order No.2. Insofar as M/s. Fortune Graphics Limited is concerned, there is an overlap between impugned order No.2 and impugned order No.3. In view of these overlaps and the fact that parallel demands are being raised by DGST, CGST (East) and CGST (North), the present writ petition has been filed challenging the said orders.
5. Mr. Beriwal, ld. Counsel on the other hand submits that these cases involve passing on of fake and fraudulent ITC and the Petitioners have an alternate remedy by way of appeals. Moreover, even the period of limitation for filing appeals has expired.
6. Heard. In all these impugned orders, there are various third-party firms which are involved which are stated to be fictitious and non-existent who have passed on ITC without actual supply of goods and services. There could be some overlap insofar as the Petitioner is concerned, however, the challenge to the impugned orders would be required to be considered in the respective appeals as the ITC availed is not related only to the Petitioner but to thousands of entities, running into several hundred crores.
7. Under these circumstances, this Court is of the opinion that while there may be overlap, the Petitioner still ought to be relegated to avail of the appellate remedy. Accordingly, it is directed that insofar as the impugned order No.2 and impugned order No.3 are concerned, i.e., the impugned orders dated 24th January, 2025 and 1st February, 2025 are concerned, the Petitioner is permitted to challenge these two impugned orders by filing appeals before the Appellate Authority.
8. Out of the total amount of tax demanded i.e., Rs.13,023,604.00/- and Rs. 9,999,135.00/- the pre-deposit shall be made only in respect of the DRC-07 dated 3rd February, 2025 passed pursuant to the impugned order No.2. From the said amount, the amount which was paid as pre-deposit towards the demand qua M/s Ganpati Enterprises i.e., to the tune of Rs. 3,43,082/- shall be deducted.
9. The pre-deposit shall be made only in respect of demand raised to the tune of Rs.13,023,604.00/- i.e., demand raised vide impugned order No. 2 Insofar as the appeal challenging impugned order No. 3 is concerned, no predeposit shall be liable to be made as the amount is over-lapping with impugned order No.2.
10. The Appellate Authority which receives the appeal qua impugned order No.3 shall consider the fact that insofar as M/s. Fortune Graphics Limited is concerned, in impugned order No.2, the demand has already been raised against the Petitioner.
11. In addition, there is a challenge to Show Cause Notice dated 6th August, 2024 wherein a demand is proposed to be raised for a sum of Rs.2,43,000/- in respect of the transactions with M/s Nymphaea Trademart Pvt. Ltd. Since the same is overlapping with the order passed on 24th August, 2024 i.e., impugned order No. 2 where the Petitioner is already in appeal, accordingly, the said Show Cause Notice dated 6th August, 2024 shall not be proceeded with qua the Petitioner.
12. Let the appeals be filed by the Petitioner by 15th November, 2025 with requisite pre-deposit as directed above.
13. Petition is disposed of in these terms. All pending applications, if any, are also disposed of.